ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
DAVID L. PIPPEN STEVE CARTER
ATTORNEY AT LAW ATTORNEY GENERAL OF INDIANA
Indianapolis, IN Indianapolis, IN
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
SHREVE/NOBIS HOLDINGS, LLC, )
v. ) Cause No. 49T10-9812-TA-212
DEPARTMENT OF LOCAL )
ON APPEAL FROM TWO FINAL DETERMINATIONS OF
THE STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
March 7, 2003
Shreve/Nobis Holdings LLC (Shreve) appeals two final determinations of the State Board of
Tax Commissioners (State Board) valuing its Morgan County property for the 1995 general
reassessment. The sole issue for the Court to decide is whether the
State Board erred in valuing two of Shreves improvements under the General Commercial
Industrial (GCI) cost schedule, as opposed to the General Commercial Kit (GCK) cost
FACTS AND PROCEDURAL HISTORY
Shreve owns real property in Martinsville, Indiana. As it relates to this
appeal, there are six buildings on the property that are rented to the
public for use as storage-units/mini-warehouses. Each building has metal-siding and garage-type overhead
doors and entrance doors.
For the 1995 general reassessment, four of Shreves buildings were classified as kit
buildings and assessed pursuant to the GCK cost schedule. The other two
buildings, however, were classified as special purpose mini-warehouses and assessed pursuant to the
GCI cost schedule.
Shreve timely appealed its assessment, first with the Morgan County Board of Review
and then with the State Board. Throughout the administrative process, Shreve argued
that because all six of its buildings were the same, the two assessed
under the GCI schedule should be assessed under the GCK schedule.
On December 1, 1998, the State Board issued its final determination in which
it denied Shreves claim. Shreve subsequently filed an original tax appeal on
December 30, 1998. The Court did not conduct a trial, as both
parties requested to have the matter resolved based on the evidence stipulated into
the record as well as on their briefs. The Court heard oral
argument on June 15, 2000. Additional facts will be supplied as necessary.
STANDARD OF REVIEW
This Court accords great deference to the State Board when it acts within
the scope of its authority. Wetzel Enters., Inc. v. State Bd. of
Tax Commrs, 694 N.E.2d 1259, 1261 (Ind. Tax Ct. 1998). Accordingly, the
Court will reverse a State Board final determination only if it is unsupported
by substantial evidence, constitutes an abuse of discretion, exceeds statutory authority, or is
arbitrary and capricious. Id.
A taxpayer who challenges the propriety of a State Board final determination bears
the burden of demonstrating its invalidity. Clark v. State Bd. of Tax
Commrs, 694 N.E.2d 1230, 1233 (Ind. Tax Ct. 1998). To do so,
the taxpayer must present a prima facie case, i.e., a case in which
the evidence is sufficient to establish a given fact and which if not
contradicted will remain sufficient. GTE North Inc. v. State Bd. of
Tax Commrs, 634 N.E.2d 882, 887 (Ind. Tax Ct. 1994) (citations and internal
quotation marks omitted). To establish a prima facie case, the taxpayer must
offer probative evidence concerning the alleged assessment error. Miller Structures, Inc. v.
State Bd. of Tax Commrs, 748 N.E.2d 943, 947 (Ind. Tax Ct. 2001).
Where the taxpayer has failed to provide the State Board with probative
evidence supporting its position on the alleged assessment error, the State Boards duty
to support its final determination with substantial evidence is not triggered. Whitley
Prods., Inc. v. State Bd. of Tax Commrs, 704 N.E.2d 1113, 1119-20 (Ind.
Tax Ct. 1998), review denied.
Shreve contends that the State Board erred in valuing two of its improvements
under the GCI cost schedules. In particular, Shreve argues that despite the
fact that all six buildings are exactly the same, the State Board provided
no substantial evidence whatsoever to support its assessment of the two buildings under
the GCI schedule (as opposed to the GCK schedule used on the other
four). The Court, however, need not discuss whether the State Boards decision
is supported by substantial evidence, because Shreve points to no probative evidence of
record indicating that the two structures are kit buildings.
Starting in 1995, the State Boards regulations included a cost schedule for certain
light, pre-engineered buildings, i.e., kit buildings. See Ind. Admin. Code tit. 50,
r. 2.2-11-6 (Schedule A4). The pricing for kit buildings under the GCK
schedule is reflective of the economical quality and low cost of materials used
in these structures.
Miller Structures, 748 N.E.2d at 949.
The key elements used to identify a kit building are, simply, the types
of interior column and roof beam support used in the building. Componx,
Inc. v. State Bd. of Tax Commrs, 683 N.E.2d 1372, 1374 (Ind. Tax
1997). Kit building interior columns and roof beam supports may include cold
form cee channel supports, tapered columns, H-columns, and steel pole or post columns.
Miller Structures, 748 N.E.2d at 950. Consequently, it should not be
difficult for taxpayers to identify those characteristics in an improvement alleged to [be
a kit building]. Whitley Prods., 704 N.E.2d at 1121. Indeed, a
taxpayer meets its burden with regard to a kit building where the taxpayer
shows that its improvements type of column and roof beam support meet the
criteria for a kit building. See Componx, 683 N.E.2d at 1374.
In presenting its case to the State Board, Shreves tax representative, Denise Praul
of True Tax Management, testified:
Several of the buildings were priced off of GCK and then there were
a couple of them that were not priced off GCK they were priced
off of GCI, I believe, as mini-warehouses. All [six] of these buildings
on this property are what we would consider kit buildings.
(Audio Tape of Administrative Hearing.) In conjunction with her testimony, Ms. Praul
submitted a photocopy of the layout of the property. (Petr Ex. 1.)
None of this evidence, however, indicates what types of interior columns and
roof supports are used in the buildings at issue. Likewise, it does
not show how the two buildings are exactly the same as the other
four. The testimonial statement that we consider the buildings to be kit
buildings is nothing more than a conclusion, and conclusory statements do not qualify
as probative evidence. Whitley Prods., 704 N.E.2d at 1119. Because Shreve
has failed to provide the State Board with probative evidence to support its
position that the two buildings are kit buildings, the State Boards duty to
support its final determination with substantial evidence is not triggered. See id.
For the aforementioned reasons, the State Boards final
determination is AFFIRMED.
The State Board of Tax Commissioners (State Board) was originally the Respondent
in this appeal. However, the legislature abolished the State Board as of
December 31, 2001. 198 Ind. Acts 2001 § 119(b)(2). Effective January
1, 2002, the legislature created the Department of Local Government Finance (DLGF),
Indiana Code § 6-1.1-30-1.1 (West Supp. 2001)(eff. 1-1-02); 198 Ind. Acts 2001 §
66, and the Indiana Board of Tax Review (Indiana Board). Ind. Code
§ 6-1.5-1-3 (West Supp. 2001)(eff. 1-1-02); 198 Ind. Acts 2001 § 95.
Pursuant to Indiana Code § 6-1.5-5-8, the DLGF is substituted for the State
Board in appeals from final determinations of the State Board that were issued
before January 1, 2002. Ind. Code § 6-1.5-5-8 (West Supp. 2001)(eff. 1-1-02);
198 Ind. Acts 2001, § 95. Nevertheless, the law in effect prior
to January 1, 2002 applies to these appeals. Id. See also
198 Ind. Acts 2001 § 117. Although the DLGF has been substituted
as the Respondent, this Court will still reference the State Board throughout this
Shreve also argues that its assessment should be voided because portions
of Indianas regulations for taxing tangible property have been declared unconstitutional. Indeed,
in 1998, the Indiana Supreme Court affirmed this Courts determination that the existing
cost schedules . . . violate the Property Taxation Clause of the Indiana
State Bd. of Tax Commrs v. Town of St. John, 702
N.E.2d 1034, 1043 (Ind. 1998). That same year, however, this Court declared
that [r]eal property must still be assessed, and, until the new regulations are
in place, must be assessed under the present system. Whitley Prods., Inc.
v. State Bd. of Tax Commrs, 704 N.E.2d 1113, 1121 (Ind. Tax Ct.
1998), review denied; see also Town of St. John v. State Bd. of
Tax Commrs, 729 N.E.2d 242, 246 & 251 (Ind. Tax Ct. 2000) (ordering
real property in Indiana to be reassessed under constitutional regulations as of March
1, 2002 and providing that until then, real property tax assessments shall be
made in accordance with the current system). The Court, therefore, will not
analyze Shreves state constitutional claim in this opinion.
Shreve also contends that because Indianas system of taxing tangible property is not
based upon objectively verifiable data, (see Petr Br. and Findings of Fact and
Conclusions of Law at 8-9), its due process rights under the Fifth and
Fourteenth Amendments to the U.S. Constitution are violated. This Court has in
the past rejected legal arguments analogous to Shreves. See Town of St.
John v. State Bd. of Tax Commrs, 690 N.E.2d 370, 38897 (Ind. Tax
Ct. 1997), revd in part on other grounds by 702 N.E.2d 1034 (Ind.
1998). Even if Shreves federal constitutional claims had merit, real property must
still be assessed, and, until the new regulations are in place, must be
assessed under the present system. See Whitley Prods., 704 N.E.2d at 1121.
The Court, therefore, will not analyze Shreves federal constitutional claim in this
[K]it buildings are made of light weight and inexpensive materials and
are fabricated at central manufacturing facilities and shipped to the construction site ready
for fast and efficient assembly.
Miller Structures, Inc. v. State Bd. of
Tax Commrs, 748 N.E.2d 943, 949 (Ind. Tax Ct. 2001) (internal quotation marks